Understood
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Maybe you received the Fidelity Funds mailing that states, " 61% of mutual fund owners do not own an international fund."
That blows me away - and reminds me that we sometimes get carried away with geeky stuff, to the point that we are blinded to the opportunity that exists just to do more good, plain simple business with more people who need our help - and not dual each other as reps.
If you do not have a good fund that is investing in primarily in India or a good international fund with large holdings in India and Asia then you are missing the boat. Of course I like international funds that invest in Canada too.
The problem here is that most mutual fund investors do their own investing or they have advisors that do not fit the traditional stockbroker mold and their advisors simply take orders. When this happens the individuals simply invest in what they know best and this is usually domestic funds. A traditional stockbroker is more likely to have their client(s) investing in individual stocks than international mutual funds.
[quote=menotellname]If you do not have a good fund that is investing in
primarily in India or a good international fund with large holdings in
India and Asia then you are missing the boat. Of course I like
international funds that invest in Canada too. [QUOTE]
Given the current 50x P/E in the chinese market and similar P/E's in the indian market. I'd pass.
However if you must invest in China/India. The new S&P China ETF
(GXC), S&P Emerging Asia (GMF) and iPath MSCI India ETN (INP) are
probably the best way to do it.
[quote] A traditional stockbroker is more likely to have their
client(s) investing in individual stocks than international mutual
funds.
[/quote]
Are there no international funds that come in A-shares?
Last time I looked, investing with an active mgr for anything int’l creates greater returns than passive mgmt styles.
I don’t recall ever selling an int’l fund with a load - ever.
Yeah, if you weren’t in China a couple of years ago, stay out. Right now Grandma Chen is taking her money out of her bank earning .4% & investing the the stock market. Do you remember when the person shining your shoes in 1999 was giving you stock tips? That was the time to get out.
[quote=Ashland]
Yeah, if you weren’t in China a couple of years ago, stay out. [/quote]
I’m not a fan of emerging markets anyways. Why take the risk?
EEM lack stability and have heightend event risk (e.g Russian Drama,
Venzuala’s Drama, Currency crisis, Hyper inflation, etc etc)
EEM lack of value vs domestic/developed world investments.
I’ve had a client who would not sell his fidelity EEM fund “cause its
done so well in the past, why would I want to sell a winner”, at least I was able to get him to shift 50% to the fidelity EEM debt fund.
I still think this is stupid but at least the debt should blow up less than the stocks. I hope.
[quote=AllREIT] [quote=Ashland]
Yeah, if you weren't in China a couple of years ago, stay out. [/quote]
I'm not a fan of emerging markets anyways. Why take the risk?
1) EEM countries are linked via exports to first world countries
2) EEM lack stability and have heightend event risk (e.g Russian Drama, Venzuala's Drama, Currency crisis, Hyper inflation, etc etc)
3) EEM lack of value vs domestic/developed world investments.
I've had a client who would not sell his fidelity EEM fund "cause its done so well in the past, why would I want to sell a winner", at least I was able to get him to shift 50% to the fidelity EEM debt fund.
I still think this is stupid but at least the debt should blow up less than the stocks. I hope.
[/quote]
I thought you and the DFA crowd invested according to MPT; asset allocation. train your clients to sell off positions that no longer proportionate (like a fidelity EEM fund), to reinvest the sales proceeds into positions that aren't large enough, right? my experience has been that those clients who understand this concept will take your recommendations to buy and sell asset classes, and not usually argue.
[quote=Big Taco]
I thought you and the DFA crowd invested according
to MPT; asset allocation. train your clients to sell off
positions that no longer proportionate (like a fidelity EEM fund), to
reinvest the sales proceeds into positions that aren’t large enough,
right? my experience has been that those clients who understand
this concept will take your recommendations to buy and sell asset
classes, and not usually argue.
I work with people who will pay me. As Rummy said, you go to war with the army you have, and not the army you want.
A couple of things here...what am I missing?!! Of course there are A-share foreign equity funds...what's the joke?!!
Also, while I'm currently not a big fan of chinese stocks overall, there are still good individual stocks there that a good manager can exploit. Also the 50 P/E quoted is based on 2006 earnings and does not accurately reflect current conditions or forward P/E projections, which are considerably lower (16 according to MS). Feel free to avoid emerging markets...they'll stay in my allocation, although perhaps not to the level they were three years ago. They're still a tool for diversification and you're kidding yourself if you think you "know" what will happen. A prudent advisor will underweight such a class rather than ignore it altogether.
I don't know if any of you have ever looked into using UIT's in this scenario..gives the client a fixed expense..Internationals tend to be higher in costs than domestic.. usually do to trading expenses ..ect..
Where as the UIT gives you a better shot of a fixed cost vs returns.. There is one on the website etfconnect called the Focus Four that has been averaging about 17% a year for the last 14 ...not to bad ..pretty broke up between domestic and international firms..
Or there is always the straight sector plays.. you can take your pic on that one with whatever suits you...
[quote=whitewlfz]
I don’t know if any of you have ever looked into using UIT’s in this scenario…gives the client a fixed expense…Internationals tend to be higher in costs than domestic… usually do to trading expenses …ect…
Where as the UIT gives you a better shot of a fixed cost vs returns… There is one on the website etfconnect called the Focus Four that has been averaging about 17% a year for the last 14 …not to bad …pretty broke up between domestic and international firms…
Or there is always the straight sector plays… you can take your pic on that one with whatever suits you…
[/quote]In the Focus Four UIT by First Trust www.ftportfolios.com - the thing that has really held up the trust is the small company component. If you take a look at the NYSE Int’l ADR portfolio, it’s not been as exciting. Anyway, you’re buying ADR’s - you’re getting a Foreign Large Value/Blend strategy because those are the only companies that list on the NYSE. You’re not getting exposure to emerging markets. In addition, it makes sense to have emerging markets actively managed because as China has recently shown us a 50% increase in an emerging market is possible in 3 - 6 months. ETF’s are a good option because your discount will offset the trading costs. Discounts, however, can always deepen!
Recent China Article:
May 18 (Bloomberg) – Merrill Lynch & Co.‘s China chairman said investors should pare their holdings in the nation, where the benchmark stock index has rallied 84 percent this year.
Valuations are too high and it's getting out of control,'' Liu Erhfei told a private equity conference in Beijing.This is a good time to exit, which by definition means it’s a bad time to invest.’’
http://www.bloomberg.com/apps/news?pid=20601014&sid=a6Y5CcbF 5Opw&refer=funds